March 25, 2017

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Authors Posts by Ryan Ong

Ryan Ong

Ryan Ong
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by Ryan Ong

There may be too many property listing sites for Singapore

WITH the addition of two new online services last year (Ohmyhome and Yotcha), the online property market has gotten crowded. Along with PropertyGuru, 99.co and StreetSine, all of them are now locked in a constant fight for your attention. And they all provide the same basic service, which is comparison.

All of this is supposed to be good for “the market”. Property agents, buyers and sellers are supposed to have it easier than ever. Listing sites are much cheaper than traditional marketing methods, such as classified ads – 99.co charges just $588 per year for 100 listings, while PropertyGuru (which is the granddaddy of property sites in Singapore) charges $2,240 per year.

Contrast this with traditional print advertisements, which can end up costing those same amounts for just a single ad.  And of course, buyers now have the luxury of looking for property on their phone, on the bus or at home.

In some respects, these sites have succeeded in changing Singapore’s property market. Some of the changes that have been caused by these sites are:

  • Buyers are quicker at spotting abnormal prices
  • The property business is becoming more entwined with the online media business
  • Buyers are somewhat better informed

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1. Buyers are quicker at spotting abnormal prices

Most property portals, such as 99.co or StreetSine, don’t just list the price of a specific property. They also show the prices of other properties in the same vicinity, which lets buyers work out the average (or median for the more mathematically inclined) price per square foot. For example, look at this screenshot:

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You can see almost immediately if a unit is exceptionally expensive or cheap. Here’s another example, which also tracks prices in the general neighbourhood:

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In the past, buyers had to dig through records themselves to check transaction histories. Portal listings practically guarantee every buyer is less likely to get ripped off, even first-timers who may not know where to check the price history. (You can check the Urban Redevelopment Authority’s records here by the way.)

The ease of information impacts our property market in ways that go beyond the portal’s user numbers. Even casually browsing the site could influence buyers and sellers.

 

2. The property business is becoming more entwined with the online media business

One major difference to the property market is that now, sellers have to fight for online visibility. Fewer buyers will walk around a neighbourhood for two hours, shopping for potential sales. They find their prospects via price and location filters on a portal site.

This leads to property agents and developers now having to think like media companies, instead of just real estate experts. If someone types “condo-jurong-under $800,000” into a search bar, every site wants to be the first result they get. As such, an increasing number of developers and agents are now also learning to think in terms of Search Engine Optimisation (SEO) and content marketing. In Singapore’s property market, “e-commerce” will soon lose its meaning – e-commerce is commerce.

At present, developers and agents are basically paying portal sites (or even private bloggers) to get them visibility. But it’s just a matter of time before they learn to produce their own online content.

Which leads to the third thing…

 

3. Buyers are somewhat better informed

Property news used to be esoteric. Go back to the 1980s; issues like stamp duties and deferred payment schemes were random words that made no sense to buyers. Today, most buyers – even those who are buying their first home – have some familiarity with concepts like the Qualifying Certificate or Additional Buyer’s Stamp Duty.

They can’t help it. Portal sites fight tooth and nail for high visibility online and that results in a non-stop deluge of content. Google one project and you’ll find a few hundred pages breaking down the pros and cons, and speculating on potential gains. And in order to get ahead, portal sites also churn out information on how loans work, what agents do, what the Option to Purchase is, and so forth.

That’s all a sneaky way to get visibility. When you type “what is an Option to Purchase”, every portal site wants to be the first to answer your question.

This results in buyers who are somewhat better informed. I say “somewhat better” because, within the mass of content, buyers are also absorbing information that persuades them to buy.

 

What hasn’t and probably won’t change no matter how many portal sites we get?

Portal sites are also credited with big industry changes, despite evidence to the contrary. They are:

  • Decreased use of property agents
  • Major changes in property prices

 

1. Decreased use of property agents

This is the number one accusation hurled at listing sites, like Yotcha. But that’s putting the cart before the horse.

In 2010, only 11 per cent of HDB resale buyers and sellers handled transactions without an agent. By 2013, that number was up to around 25 per cent. HDB itself has concise guidelines for buyers and sellers wanting to do this. You’ll note that Yotcha (and the app Ohmyhome, which bypasses the need for property agents) came about in 2016.

In other words, services like Yotcha came about as a response to fewer people using property agents. They are not a “cause” of it.

The commission of a property agent in Singapore is around 2 per cent of the sale price for sellers. On a $350,000 flat, that’s a hefty $7,000. So it’s not surprising that most people will at least try to muddle through it first and then call in an agent as a last resort.

Of course, this isn’t to say that Yotcha won’t compound the problem – it is too new to tell. But in the words of Billy Joel, it didn’t start the fire.

 

2. Major changes in property prices

So price comparison drives prices down, right? That’s a supposed benefit of comparison platforms, but we should be careful not to exaggerate the impact.

Property prices move for a huge variety of reasons. Property prices in Singapore are going down because of cooling measures by the G, a weakening economic outlook, fewer rich expats due to the slump in oil and gas and finance, and many other possible factors. One of those many factors may be the increased use of portals and price comparisons. But we can’t know that for sure or guess to what degree it contributes to falling prices.

The flip side is also true. If there’s a huge hype for a particular area, prices will be inflated. And the comparison platforms will reflect and reinforce that. When you can see everyone hiking prices, you will too.

It’s more accurate to say that various portal sites reflect the market sentiment. Property portals probably won’t be the catalyst for major price changes, no matter how many of them we have.

 

Featured image House/Home Inspection by Flickr user Mark Moz. (CC BY 2.0) 

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by Ryan Ong

BACK when President Donald Trump said he was going to fight a trade war with China, the business community only took him half-seriously. Any Trump statement was assumed to be 80 per cent bovine excrement, 10 per cent badly distorted fact and 10 per cent Russian bribery. But now that he’s in power, Trump seems serious about helping America to commit suicide. So stock up on canned food, and start learning how to conduct DIY dental surgery. We don’t know whether America or China will win this fight, but we sure as hell know we’ll be the ones who lose:

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by Ryan Ong

EVERYTHING is a commodity these days. Facebook likes, views on your blog, forgiveness in a mega-church, and now even your insurance policy. For those of you who bought an endowment policy, and then regret it, there’s a way out. In case you haven’t heard it blaring over a radio advertisement yet, there are people out there who want to buy your policy:

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by Ryan Ong

EVERYTHING is faster and more efficient in the age of digital banking, including going bankrupt. When you consider you can get four times your monthly income in cash, in 15 minutes, it’s pretty amazing we’re all not stress eating caviar while looking at our monthly bills. For those without self-control though, the Association of Banks in Singapore (ABS) has made a help package – in the form of a new debt consolidation programme:

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by Ryan Ong

HOUSES are valuable assets, right up till you realise you’re short on cash. After the tenth straight week of donating blood just for free Milo, that sea view unit will seem a lot less appealing. If only you could, oh, unpay some of the money you’ve put in the mortgage, or get some money out of your house without renting or selling right? Well, you could:

by Ryan Ong

HARD or soft, how would you like your country’s implosion? That was pretty much the final “vote” Britain was left with since they have decided on Brexit. And with it choosing the former, the pound has taken another, well, pounding of late. It has fallen 19 per cent against the US dollar, largely because the UK needs the EU more than the other way around. But perhaps new British Prime Minister Theresa May hasn’t got much of a choice either way:

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by Ryan Ong

LATE payments are part and parcel of running your own business.

At some point, you’ll come across a customer or client who can’t pay you; at least not on the agreed-upon date. And while you can always drag them to the small claims court, that’s a good way to burn bridges (and waste even more time). That’s why these days, an increasing number of small businesses, and even freelancers, are turning to invoice factoring services:

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by Ryan Ong

CONSIDERING Donald Trump believes climate change is a Chinese hoax, no one expects him to be bandaging wounded rhinos or painting with the colours of the wind.

But while his position is simple, his environmental policy reads like random words off a Scrabble board. It’s not often that history gifts us with something so magnificently ludicrous (besides Trump himself), so it deserves to be studied. Five hundred years after the ice caps melt, I hope our descendants will discover this article in the great sunken city of Sing-ha-P’ore, and learn that humanity didn’t always have radiation sores.

 

America’s Environmental Protection Agency is now led by a man who doesn’t believe the environment needs much protecting

Mr Scott Pruitt, attorney general for Oklahoma, made big news in 2014. He accused America’s Environmental Protection Agency (EPA) of overestimating the air pollution from drilling oil wells. His source for this was Devon Energy, which is one of Oklahoma’s biggest oil and gas companies. Obviously, no one took it seriously, because most people have an IQ above five.

Well, President-elect Trump took one look at that, and decided to appoint Mr. Pruitt to head the EPA, the very agency which he accused.

But because this isn’t weird enough, Mr Pruitt is also involved with a bunch of other players in suing the EPA (this is related to Clean Power Plan, which we explain below). Let that sink in: the agency is now being headed by a man who is involved in suing it. Furthermore, he’s a leading advocate against the EPA’s activist agenda. You know how I found that out?  He wrote it on his LinkedIn profile.

Even if this isn’t the most ridiculous conflict of interest in… well, ever, we have to wonder how exactly Mr Pruitt will lead the EPA. Will he change the office dress code to permanently include blindfolds? Will fines be replaced with making the polluting companies just say they’re really sorry?

Whatever the case, the appointment of Mr Pruitt means America now has one of the most useless government bodies in the world. It’s the equivalent of Mas Selamat being put in charge of our Internal Security Department. You can be sure any achievements are the result of dumb luck.

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The articulate description of the environmental policy

If the Trump environmental policy was just plain evil, it wouldn’t be worthy of attention. We’d at least know what to expect, and can find a good hiding place for the pandas before people start paying to shoot them. What makes the environmental policy so amazing is how confused it is.

Before his election, President-elect Trump was convinced climate change is a Chinese hoax. Today, he’s “open-minded” about it. His stance on climate change, based on that link, is:

I’m very open-minded. I’m still open-minded. Nobody really knows. Look, I’m somebody that gets it, and nobody really knows. It’s not something that’s so hard and fast. 

The only consensus on that quote is that he was probably speaking English.

Also, the first daughter, Ms Ivanka Trump, might want to champion environmental protection from climate change. Yeah, that won’t be a problem; her father can introduce her to the head of the EPA.

 

The plan to restore coal mining is based on bizarre assumptions

Remember the Clean Power Plan (CPP) we mentioned Mr Pruitt was involved in suing? That’s a plan put forward by the Obama administration, which seeks to cut carbon dioxide emissions by the United States.

It exists because most of the planet agrees Waterworld was crap enough as a movie, let alone a real scenario. The lawsuit involves some 15 states, which don’t want to follow the carbon restrictions; but they’re not important here.

What matters is that the Trump administration really wants the CPP gone; and a large part of that is due to the President-elect’s promise to revitalise coal mining.

There’s a relation between the two: coal is one of the leading sources of carbon dioxide emissions, and is only really used for power due to energy poverty (quick translation: used by countries that are poor to afford cleaner, more expensive sources of power).

If the CPP is undone, and companies can emit as much carbon as they want, then coal – and coal mining – will be back in business. That’s the rationale of the Trump administration anyway.

The problem with this plan, besides it being the sort of thing a Saturday morning cartoon villain would come up with, is that coal mining won’t come back just because people get to pollute more.

Coal is on the decline because of a range of factors, such as China (once the world’s largest buyer of coal) consuming a lot less of it. Coal prices are also falling due to fracking and the abundance of natural gas, which is a cleaner source of cheap energy. And of course, developments in renewable energy, such as solar and wind power, make these options cheaper all the time.

In effect, lifting carbon pollution restrictions to help coal mining is like lifting restrictions on video rental stores, and believing it will make them popular again. There are few prospects for coal to bounce back, but the Trump administration has decided “hey, whatever will buy a coal executive’s vote!”

 

The chest thumping over the Paris Agreement

The Trump administration has played up the way the President-elect will quit the agreement, in a four-year process. The language used makes it sound like some kind of bold and complex gesture, worthy of a Tom Clancy espionage novel.

But the Paris Agreement was unique, in that it was not legally binding in any way. The highlight of the Paris Agreement was that it would try a new approach, which was free of legal entanglements: rather than make participants sign a bunch of agreements, which had to be passed by their various legislatures, countries would set their own targets and commit to them.

Countries are also free to pursue those goals however they want. You can read the details of how it works here.

What this means is that America – or any of the participants – can freely ignore the agreement anyway. There isn’t a Paris Agreement Strike Force that will invade the country in black helicopters, if they don’t meet targets. Loudly announcing a decision to “leave the agreement” is like standing on your desk, pulling off your shirt, and yelling that you’re going to break your new year’s resolutions. No one cares, and it just makes you look like a loud jerk.

 

There are two ways this will get less funny

The first is if Trump passes total control of environmental policy to the chamber of Batman villains he calls his cabinet. If he does that, American Republicans will make it another drab, pro-business, anti-planet set of policies. The other way is when the ice caps melt, and you’re just happy you caught enough roaches to feed your family.

 

Featured image by Sean Chong.

If you like this article, Like The Middle Ground‘s Facebook Page as well!

For breaking news, you can talk to us via email.

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by Ryan Ong

PROTECTIONISM has gone from being a pro-business position, to being an anti-business position, to being pro-business again. Back in the 1930s, for example, the Smoot-Hawley Act in the United States raised around 900 tariffs. It was one of the most protectionist moves of all time and it ended up being credited with prolonging the Great Depression. From that point on, “protectionism” and “tariffs” became vulgar. The only people who wanted it were lazy, entitled workers and filthy communists. But in the wake of Brexit and the Trump election, it’s clear that position is becoming reversed; now, ASEAN is faced with the prospect of a more protectionist America: